Strasbourg seat EU Parliament in black and white coronavirus (COVID-19) update text

UK government ensures financial help for small businesses amid COVID-19 crisis

What help is available from the UK Government to ease the affects of coronavirus (COVID-19) on your business?

As coronavirus tightens its grip on Europe, what help is the British government offering small business owners with less than 10 employees?

For self-employed/sole traders:

  • Exemption from IR35 until April 2021
  • Access to Hardship Fund
  • Access to Universal Credit
  • Self-employed workers will be able to apply for a grant of up to £2,500p/m

For small businesses:

  • £10,000 as part of Chancellor’s Covid-19 Bill
  • Business Interruption Loan Scheme loans
  • Eligible for small businesses rate relief (SBRR) or rural rate relief
  • Subsidies for up to 80% of total pay available to workers

Please see the government website for details on applying for support.

The above information is correct as of 20/03/2020.

We are living in extraordinary times. Covid-19 has paralysed almost every aspect of daily life, as countries continue to shut down and confine people to their homes in order to stop the spread of the virus.

Just as we are worried about our health, loved ones and jobs, spare a thought for small businesses, which are facing the biggest threat to their survival in living memory.

Virtually every single business on the planet is concerned and, if they are not, they should be. While large companies may have the resources to ride out the storm and come through the other side, it is the small companies – often the lifeblood of the community – that could be worst affected.

They don’t have the resources to simply close down and wait for this to blow over.

£10,000 grant for small businesses

It’s important not to worry as help is being made available. On March 17th, the government announced a series of unprecedented measures to give small enterprises the best chance of survival – read about the government plans to help employees, employers and businesses here.

Perhaps the most crucial and obvious of those is the £10,000 cash grant available to small firms. This is part of Chancellor Rishi Sunak’s ‘Covid Bill’, which will free up £330 billion – or 15% of the entire UK economy – in loans to ensure that British enterprises avoid financial meltdown.

Interest rates slashed

Further, the Bank of England slashed the UK’s interest rate from 0.25% down to 0.1% on March 19th – which means that interest rates are at their lowest level ever. Not only is this good news for those with a tracker rate mortgage, it also allows smaller firms to borrow short-term cash at a very low rate.

Interest-free loans

SMEs will also be able to access the Business Interruption Loan Scheme, which has been modified since the Budget was announced in early March.

While the top borrowing limit of £5 million will not affect those companies that employ less than 10 people, a noteworthy part of this scheme is that all loans are to be exempt from interest for six months and the Exchequer has vowed to guarantee up to 80% of each amount borrowed.

Self-employed help

For sole traders or the self-employed, there are also options available. If you are self-isolating, in-line with national recommendations, you may well be entitled to support from the Hardship Fund, which has a pot of £500 million.

The Ministry for Housing, Communities and Local Government in England will soon announce measures pertaining to the fund, but in the meantime you can contact your Local Authority for more information.

Further options include easier access to both Universal Credit without attending the Job Centre and the new Employment and Support Allowance which you can find more official information on here.

Business rate relief

Companies in the retail, hospitality and leisure industries, which comprise some of the hardest-hit areas, will also be exempt from business rates for the next year. Certain small businesses will also be eligible for small businesses rate relief (SBRR) or rural rate relief.

If so, the local authority will be in touch directly in early April. Finally, the much-maligned IR35 rule, which was to be brought in to stop contractors who are essentially full-time employees paying less tax, has been postponed until April 2021. However, the government has reiterated that it will not be scrapped.

However, the government has reiterated that it will not be scrapped. It is also worth noting that the survival of large companies will also help smaller initiatives pull through this uncertain period in our turbulent history. To that end, a number of the above-mentioned schemes have also been extended to large initiatives on a bigger scale.

While these are undoubtedly uncertain times, help is at hand and it is important to note that, as a small business owner, there are financial options open to you. But please remember, as well as looking after your financial well-being, it is important to take care of your emotional and mental health.

The pressures and burdens of owning your own company will be intensified at this time, so look after yourselves and each other.

Free and helpful information on mental health can be found here.

Here at Zervant, we are constantly monitoring the situation and will be updating this article when new information is announced. We are open and ready to help with any issues you may have.

For specific questions regarding our service or the impact COVID-19 has on your invoicing, please send us a request.

For other questions you may have, advice can be found in our help centre or on our blog.

Stay safe, healthy and well.

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